Ram Singh purchased 1000 equity shares of Fashion Limited at a cost of ₹155 per share on 19.06.1997 and paid 1% brokerage. On 15.11.2000 the company allotted him bonus shares on the basis of one share for every 5 shares

Answer 6A(iii) Computation of Capital Gains Particulars Amount (₹) Original Shares (1000 shares) Sale consideration (1000 shares x ₹700) 7,00,000 Less: Brokerage @ 1% (7,000) Net sale consideration 6,93,000 Less: Cost of acquisition The cost of acquisition shall be higher of (i) Cost of acquisition ₹155 per share + 1% brokerage = ₹156.55 AND (ii) Lower of (a) FMV as on 31.01.2018 - ₹450 per share (b) Sale Price - ₹700 per share Hence the cost of acquisition shall be ₹450 per share. (4,50,000) Long-Term Capital Gain (A) 2,43,000 Capital gain on Bonus Shares (200 shares) Sale Consideration (200 shares x ₹700) 1,40,000 Less: Brokerage @ 1% (1,400) Net sale consideration 1,38,600 Less: Cost of acquisition The cost of acquisition shall be higher of (i) Cost of acquisition ₹260 per share (FMV on 01.04.2001 for shares acquired before 01.04.2001) AND (ii) Lower of (a) FMV as on 31.01.2018 - ₹450 per share (b) Sale Price - ₹700 per share Hence the cost of acquisition shall be ₹450 per share. (90,000) Long-Term Capital Gain (B) 48,600 Capital gain on Bonus Shares (800 shares) Sale consideration (800 shares x ₹700) 5,60,000 Less: Brokerage @ 1% (5,600) Net sale consideration 5,54,400 Less: Cost of acquisition The cost of acquisition shall be higher of (i) Cost of acquisition NIL (for bonus shares allotted after 01.04.2001) AND (ii) Lower of (a) FMV as on 31.01.2018 - ₹450 per share (b) Sale Price - ₹700 per share Hence the cost of acquisition shall be ₹450 per share. (3,60,000) Long-Term Capital Gain (C) 1,94,400 Total Long Term Capital Gain (A+B+C) 4,86,000